SEC Form 3

FORM 3

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 INITIAL STATEMENT OF BENEFICIAL OWNERSHIP OF SECURITIES Filed pursuant to Section 16(a) of the Securities Exchange Act of 1934 or Section 30(h) of the Investment Company Act of 1940

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1. Name and Address of Reporting Person* Carges Mark T (Last) (First) (Middle) C/O RALLY SOFTWARE DEVELOPMENT CORP. 3333 WALNUT STREET (Street) BOULDER CO 80301 (City) (State) (Zip)	2. Date of Event Requiring Statement (Month/Day/Year) 04/11/2013	3. Issuer Name and Ticker or Trading Symbol Rally Software Development Corp [ RALY ]
		4. Relationship of Reporting Person(s) to Issuer (Check all applicable) X Director 10% Owner Officer (give title below) Other (specify below)	5. If Amendment, Date of Original Filed (Month/Day/Year)
			6. Individual or Joint/Group Filing (Check Applicable Line) X Form filed by One Reporting Person Form filed by More than One Reporting Person

Table I - Non-Derivative Securities Beneficially Owned
1. Title of Security (Instr. 4)	2. Amount of Securities Beneficially Owned (Instr. 4)	3. Ownership Form: Direct (D) or Indirect (I) (Instr. 5)	4. Nature of Indirect Beneficial Ownership (Instr. 5)
Common Stock	558	I	By The Mark Carges & Carol Timko Carges Revocable Trust uad 03/21/2009

Table II - Derivative Securities Beneficially Owned (e.g., puts, calls, warrants, options, convertible securities)
1. Title of Derivative Security (Instr. 4)	2. Date Exercisable and Expiration Date (Month/Day/Year)		3. Title and Amount of Securities Underlying Derivative Security (Instr. 4)		4. Conversion or Exercise Price of Derivative Security	5. Ownership Form: Direct (D) or Indirect (I) (Instr. 5)	6. Nature of Indirect Beneficial Ownership (Instr. 5)
	Date Exercisable	Expiration Date	Title	Amount or Number of Shares
Stock Option (right to buy)	(1)	11/16/2021	Common Stock	46,120	$5.93	D
Series A-1 Preferred Stock	(2)(3)	(4)	Common Stock	4,000	(2)(3)	I	By The Mark Carges & Carol Timko Carges Revocable Trust uad 03/21/2009
Series B Preferred Stock	(2)(5)	(4)	Common Stock	3,552	(2)(5)	I	By The Mark Carges & Carol Timko Carges Revocable Trust uad 03/21/2009

Explanation of Responses:

1. Grant to the Reporting Person of a stock option under the Issuer's Amended and Restated 2002 Stock Option Plan (the "Plan"). 1/36th of the shares subject to the option vest each month after 12/17/11, provided, if the Reporting Person is terminated without cause or resigns for good reason (as defined in the stock option agreement), then, in each case, the vesting of the options will be accelerated with respect to 100% of the shares. The option expires ten years after the date of grant.

2. Immediately convertible into shares of the Issuer's Common Stock at the Reporting Person's election.

3. The shares will automatically convert into 4,000 shares of the Issuer's Common Stock immediately upon the closing of a Qualified Public Offering (as defined in the Issuer's Amended and Restated Certificate of Incorporation, as filed with the Delaware Secretary of State on April 1, 2013).

4. The shares do not have an expiration date.

5. The shares will automatically convert into 3,552 shares of the Issuer's Common Stock immediately upon the closing of a Qualified Public Offering.

	/s/Mark T. Carges	04/11/2013
	** Signature of Reporting Person	Date
Reminder: Report on a separate line for each class of securities beneficially owned directly or indirectly.
* If the form is filed by more than one reporting person, see Instruction 5 (b)(v).
** Intentional misstatements or omissions of facts constitute Federal Criminal Violations See 18 U.S.C. 1001 and 15 U.S.C. 78ff(a).
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